General Surgery Coding Alert

Reader Questions:

Observation Status Is Outpatient

Question: When providing a consult for a patient admitted to observation, should we report the inpatient or outpatient consult codes? What if the patient is subsequently admitted to the hospital?


Pennsylvania Subscriber
Answer: You should consider patients admitted to observation status as outpatients for coding purposes. Therefore, if the surgeon provides a consult for a patient in observation, she should choose from among the office or other outpatient consultation codes (99241-99245) based on the E/M service level supported by documentation.

Even if another physician subsequently admits the patient to the facility, if your surgeon provided the consult while the patient was still in observation, you should report an appropriate outpatient consult code.

If your surgeon admits the patient to the facility as a result of the consult she provides, you can report only the higher-level E/M service - in this case, the hospital admission (99221-99223). You may consider the effort involved in the consult, however, when choosing an initial inpatient services code, which could result in a higher-level service than if the surgeon provided the admission only.
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